Is Ethereum Price Forming a Macro Bottom?

Many investors across are losing hope on Ethereum price due to its unspiring performance in 2024. While many top altcoins have more than doubled in 2024, ETH continues to disappoint investors. Often when the sentiment is at an all-time low the assets tend to shoot higher. With emotions running low on Ether, it might be time to ask yourself – Is Ethereum price forming a macro bottom?

Is Ethereum Price Forming a Macro Bottom?

The answer is most likely yes. Technicals and on-chain metrics suggest that a bottom isn’t too far away for ETH. Let’s take a look at the technicals on why Ether could be forming a generation bottom before the start of a massive bull run.

The macro bottom idea revolves around how the 50-day and 200-day Exponential Moving Averages (EMA) coupled with price action could hint that ETH could be forming a generation bottom.

This thesis takes a look at the last two higher time frame bottoms and how price behaved around the 50-day and 200-day EMAs, leading to a new ATHs. Now that similar signals are forming, we can speculate that ETH could be forming a similar bottom that leads to a bull rally.

During both the previous cycle bottoms, Ethereum price was rangebound and largely stayed below the 50-day and 200-period EMAs. When the attempted recovery above the 200-period EMA failed, it led to a fakeout and a correction. This retracement formed a strong support, leading a bull run and a new ATH.

ETH Price Forming Macro Bottom?

As of October 26, 2024, Ether has completed the fakeout and is currently retracing lower, in search of a potential bottom. If history repeats, then a recovery rally that overcomes the 200-period EMA could confirm the start of the bull run.

What is Ethereum’s macro Bottom Level?

If ETH has already formed the macro bottom then it is the August 4 swing low of $2,127. However, if the above Ethereum price fractal plays out and ETH retraces lower then, it could potentially sweep the relatively equal lows formed around $2,127 and set up a new macro bottom around $2,100 or $2,000.

Why Everybody Hates Ethereum in 2024?

Now that we understand why Ethereum price could be forming a macro bottom, let’s take a look at why many investors will not agree with this outlook and will believe that ETH could drop much lower or not perform. Additionally, let’s explore what investors are saying about Ether and what Vitalik Buterin, the creator of ETH has to say.

Ethereum’s YTD Gains Fail to Woo Crypto Investors 

In the past 300 days, aka a year-to-date, the value of ETH is up by 8%. Traditional finance assets like Gold or the S&P500, which are relatively stable asset classes, have returned 33% and 22%, respectively in 2024. To make matters worse, Solana (SOL), a well-known competitor to Ether, rose more than 8% in under 24 hours last week. The YTD performance of BTC & SOL price shows that it is up 51% and 53%, respectively.

ETH Price Performance vs. BTC, SOL, GOLD, S&P500

2 Reasons Why Ether Has Become a Laggard in 2024?

Perhaps, the main reason for this lackluster performance in Ethereum could be attributed to two key factors – the launch of spot Bitcoin ETF coupled with ETH’s narrative and meme coin explosion on Solana.

Spot ETFs Remove Spotlight from ETH

The launch of ETFs were a big step forward for the cryptocurrency ecosystem as a whole. While both BTC and ETH have spot ETFs, traditional finance or institutional investors prefer BTC over ETH mainly because of how simple Bitcoin’s narrative is – ‘digital gold’. ETH, on the other hand, has to sell baby boomers a ‘world computer’ or ‘smart contract’ narrative.

Additionally, the spot BTC ETF attracted too much liqudity leaving little for ETH.

Ethereum-killer Solana Gained ETH’s Spotlight

Solana became ground zero with the explosion of meme coin narratives. Many retail investors that invested a few bucks became milionaires or at least made life-changing money in just a few hours or days. This narrative-based retail frenzy boded well for SOL due to its fast transaction speeds, lower gas fees and easy-to-use applications.

Ethereum, with its relatively slower transaction speed and higher gas fees got left behind, while SOL received massive capital inflows form both instutions and retail alike.

Some other reasons why ETH failed to perform in 2024 include the constant selling pressure from Ethereum Foundation, lack of ETF inflows and Ether’s high correlation to Bitcoin that is in a seven-month rangebound movement.

These factors together explain why ETH price’s returns over the past 300 days remains under 10%.

What Investors Think about ETH

Byzantine General, a popular analyst, pointed out Ethereum vs. Solana and asked his 207K followers if the “the entire market actually just completely abandoned $ETH”

SOL v. ETH

Sheldon Evans, a crypto influencer, posted to X, “SOL is casually up 400% against ETH, and I see no reason for this outperformance to stop.”

Other metrics further illustrate the sad state of ETH. For example, the fees on Solana hit $2.7 million as of October 26, surpassing Ethereum fees of $2.6 million.

ETH vs. SOL 24-hour fees

Here’s What Vitalik Buterin Thinks of ETH

Vitalik Buterin is optimistic about Ethereum and its future. Buterin has already outlined his thoughts on the next few upgrades for ETH, both long and short term. As for the price aspect of ETH, he addressed the complaints about him and Ethereum Foundation selling Ether. Buterin said,

“the ETH foundation is paying researchers and devs that are responsible for
(i) ethereum not bleeding 5M ETH/year to proof of work
(ii) your fees being low today
(iii) your txs getting included in < 30s instead of like 1-30 min (eip 1559)
show some respect”

He also mentioned that he hasnt’ “sold a single ETH in the past month” and that the total ETH he holds “has actually gone up.”

Concluding Thoughts

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